SST not only factor affecting prices
Published on: Saturday, October 20, 2018
Kuala Lumpur: The Sales and Services Tax (SST) is not the only factor influencing the prices of goods, says Finance Minister Lim Guan Eng (pic).He said the other factors included demand and supply, foreign exchange rates, global oil price and profit margins.These factors are being monitored closely by the government and anti-profiteering actions will be taken against businesses that are taking advantage of the situation to increase prices and reap unreasonable profits, he added.
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"The Domestic Trade and Consumer Affairs Ministry has carried out enforcement activities to combat profiteering."The ministry is also appealing for cooperation from consumers for information if they are aware of these unhealthy trade practices," he said in response to a question from Tan Sri Annuar Musa's (BN-Ketereh) at the Dewan Rakyat.Lim said confusion arose among the public due the difference in scope between the Goods and Services Tax (GST) and the SST, the respective tax rates and the effect of both tax regimes on prices."The number of goods slapped with sales tax rate of 5.0 per cent and 10 per cent, and services with a taxe rate of 6.0 per cent are fewer than those imposed with GST," he said.
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Lim said if there were any price increase following the SST implementation on Sept 1, generally the effect was lower compared with the increases resulted from the introduction of the GST on April 1, 2015 as the SST collection was much lower than the GST.He said the SST revenue would be about RM21 billion a year compared with the GST collection of RM44 billion in 2018, he said.
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"This means the tax burden on consumers is significantly lower because RM23 billion is returned to the people in the form of lower tax collection. The reduction in tax payments means the people have more money to spend now," he said.He said this was due to 60 per cent of the items in the Consumer Price Index basket of goods were taxed under the GST regime compared with only 38 per cent under the SST and 11,197 goods charged under the GST while only 6,405 goods were subjected to the SST.Furthermore, the 5,443 goods and services exempted from the SST were 10 times larger than the 545 exemptions under the GST, Lim added. He said since the SST was implemented, the Finance Ministry together with the Royal Malaysian Customs Department had evaluated the feedback and appeals from stakeholders in the business and industrial sectors which resulted in additional exemptions given and the re-examination on the tax rate of several more goods.Stay up-to-date by following Daily Express’s Telegram channel.
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